BSE Ltd has entered the Nifty 50, replacing IT major Wipro, in the National Stock Exchange’s semi-annual index review effective September 30.

Why does this happen? Index providers periodically rebalance to keep benchmarks representative. Companies are ranked by market capitalisation and liquidity, and the top 50 make the cut. BSE’s market value has surged on strong trading volumes.

The practical effect is mechanical but powerful. Nearly $97 billion in passive funds track the Nifty 50, so index funds must buy BSE shares and sell Wipro to mirror the new composition. That forced buying often lifts the incoming stock.

What should investors do? If you hold Nifty 50 index funds or ETFs, nothing changes for you directly; the fund manager handles the switch. Direct shareholders of BSE may benefit from the buying wave, while Wipro holders could see selling pressure.

The bigger lesson: index investing rewards scale and liquidity. Today’s reshuffle is a reminder that even blue-chip status is never permanent.